During the housing boom from 2004 to 2009, approximately 309 million square feet of Chinese drywall was imported into the United States. Since then, over 600 lawsuits have been filed alleging that the imported drywall contains sulfur compounds which when exposed to heat and moisture, release sulfurous acids causing a noxious smell and the corrosion of metals. Most significantly, the corrosion has been noted on copper components, such as wiring, refrigerator coils, and the coils of air-handling units. The lawsuits also alleged a variety of health issues, which were linked to the tainted Chinese drywall, however, according to a CDC report, no link between Chinese drywall and health issues was determined (see A&C blog dated February 24, 2011). Although, the majority of litigation is in the Southeast United States, reports indicate that Chinese drywall may have been used in construction across the United States (see A&C blog dated January 11, 2010).

On January 10, 2012, a federal judge approved a settlement pursuant to which a Chinese drywall manufacturer (Knauf Plasterboard Tianjin Co.) will pay hundreds of millions of dollars to resolve court claims by thousands of Gulf coast property owners who allege that the product wrecked their homes. The Chinese drywall manufacturer has agreed to create an “uncapped” fund to pay for repairing roughly 4,500 homes in Florida, Louisiana, Mississippi, and Alabama. The settlement agreement also creates a separate “capped” fund of $30 million to pay for other types of losses including health issues. A fairness hearing is scheduled on the settlement in June 2012.

Reference: The New York Times.

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